As detailed in Diligent Market Intelligence’s (DMI) recently published Investor Stewardship Report 2023, anti-ESG shareholder proponents have largely struggled to win support for demands focused on encouraging companies to adopt a narrower definition of their fiduciary duties, such as abandoning diversity or sustainability goals. According to DMI data, none had managed to secure majority support, at least in the first 11 months of 2023.

The very definition of “anti-ESG” has been challenged by many of its main proponents as mischaracterized or misunderstood. The National Center for Public Policy Research (NCPPR) told DMI that it gets “slapped with an ‘anti-ESG’ label” although its corporate engagements are “pro-fiduciary and pro-neutrality” while the National Legal and Policy Center (NLPC) has argued that the goal is “not for companies to start to embrace conservative policy positions on issues, but to convince them to return to prioritize their fiduciary duties without regard for divisive political positions.”

To better illustrate where support for these objectives has been derived from, DMI examined regulatory filings to identify the investors that most frequently voted in favor of proposals from the key anti-ESG shareholder activists:

Impact Shares

Impact Shares, founded in 2014 by fund management veteran Ethan Powell, sets out to provide investors with equity market proxies while translating their social values into an investable product. In doing so, it partners with foundations or religious denominations and socially responsible organizations “to gather capital and deploy it in a manner to advance their organization’s mission.”

With $174 million assets under management (AUM), the Texas-based fund manager says that on social matters, its mission is to facilitate positive corporate social behavior through alignment of capital with specific desired corporate social outcomes.

It supported the greatest number of shareholder proposals filed by “anti-ESG” proponents from December 2022 to June this year, with 47 votes cast in favor. Many concerned demands asking big brands such as McDonald’s and Apple to commission audits analyzing the impacts of their respective diversity, equity and inclusion policies on civil rights and non-discrimination. At McDonald’s, the fund backed such a proposal led by NCPPR which had argued that “under the guise of ESG, corporations have allocated significant resources and attention towards implementing social justice into workplace practices and hiring,” which in NCPPR’s view led to “the distribution of pay and authority on the basis of race, sex, orientation and ethnicity rather than by merit.” That demand secured 2.4% support.

At Apple, the investor group supported NCPPR in a similar resolution which expressed concern over how Apple’s diversity programs, “raise significant objection, including concern that the programs themselves are deeply racist, sexist and otherwise discriminatory.” The resolution secured 1.4% support.

Innovator Capital Management

Coming out of Illinois, Innovator Capital Management was co-founded by exchange-traded fund (ETF) entrepreneurs Bruce Bond and John Southard in 2017 with a focus on defined outcome ETFs.

The $11 million-AUM fund manager backed 42 proposals from “anti-ESG” filers during the period, including 11 resolutions asking Apple, IBM and Boeing, among others, to report on their corporate operations with China.

At IBM, Innovator backed an NCPPR proposal which argued that doing business in China, which “is controlled by the dictatorial and inhumane” Chinese Communist Party (CCP), contradicts the company’s commitment to human rights as laid out in its 2021 ESG report. The resolution secured 7.1% backing from investors.

According to Innovator’s voting policy, it will vote against proposals pushing for sustainability reports, greenhouse gas (GHG) emissions reduction goals, the disclosure of risks related to genetically modified organism (GMO) issues and proposals promoting recycling and recyclable packaging. The fund manager said it assesses shareholder proposals on a case-by-case basis for demands requesting a report on renewable energy adoption and would vote for proposals requesting a report on antibiotics in livestock.

Innovator has said it will generally vote against proposals regarding equal employment opportunities and discrimination, and against demands for additional information on affirmative action efforts.

Knights of Columbus Asset Advisors

Knights of Columbus (KoCAA) is a Catholic faith-based fund manager with an investment portfolio of over $28 billion. It positions itself as “the intersection of Catholic and Capable” and has a stated commitment to the United States Conference of Catholic Bishops’ (USCCB) socially responsible investment guidelines for faith-based investing. These guidelines are focused around six main themes of protecting human life, promoting human dignity, reducing arms production, pursuing economic justice, protecting the environment, and encouraging corporate responsibility.

In joint second, the Connecticut-based investor supported 42 proposals from “anti-ESG” filers, including demands concerning content governance, board oversight of discrimination and corporate operations with China.

One such proposal backed by the fund manager and filed by the NCPPR asked hospitality company Marriott International to report on partnerships with globalist organizations including the World Economic Forum (WEF), Business Roundtable (BR), Council on Foreign Relations (CFR), Rockefeller Foundation or the Bilderberg Group. “The agendas of WEF, BR and other such globalist organizations are antithetical with the company’s fiduciary duty,” NCPPR argued. The resolution secured 1.4% support.

KoCAA also supported an NLPC proposal asking Disney to report on the nature and extent to which its corporate operations depend on, and are vulnerable to, communist China described as “an established serial violator of human and political rights.” The proposal won 7.4% support at the media giant’s annual meeting.

Strive Asset Management

Founded in 2022 by entrepreneur and Republican presidential candidate Vivek Ramaswamy, Strive Asset Management argues that many large asset managers are redefining the purpose of American for-profit corporations by pushing companies to shift their priority from shareholders to other stakeholders – anyone potentially affected by a corporation’s actions. “At Strive, we reject this shift. Unlike our competitors, we are unapologetically committed to shareholder primacy and believe that the purpose of a for-profit company is to maximize long-run value to investors.” However, in a letter to investors, Strive moved to challenge its perception of being a “political- over investment-oriented” fund as it looks to capitalize on new growth opportunities.

Strive voted for 34 proposals submitted by “anti-ESG” proponents during the period. The Ohio-based fund manager backed a proposal filed by the Bahnsen Family Trust asking Exxon Mobil to charter a new board committee on decarbonization risk. Strive stated that the company could lose significant markets and revenues if it ignores the risks of decarbonizing in response to calls from certain activist investors and political organizations. The resolution secured 1.6% support.

Strive also backed two proposals filed by Steve Milloy and NCPPR asking Chevron and Home Depot to drop proposals that had passed in previous years.

At Chevron, Milloy secured 1.3% support for his bid to reverse course on a 2021 proposal to reduce Scope 3 emissions, arguing that such a reduction would also necessitate the reduction of customer use of Chevron’s products. At Home Depot, NCPPR’s call to overturn a 2022 racial equity audit proposal that it argued could “jeopardize [the company’s] value by elevating divisive identity politics above its commitment to excellence” attracted just 0.9% support.

Christian Brothers Investment Services

Christian Brothers Investment Services (CBIS) is an investment firm, founded in 1981 by De La Salle Christian Brothers, to provide socially responsible investment management services exclusively to Catholic organizations. “From a Catholic perspective, ethical and socially responsible investing… requires us to evaluate specific investments in terms of how those companies or entities protect life, promote human dignity, act justly, enhance the common good, and provide care for the environment,” the fund manager states on its website.

It cast 22 votes in favor of proposals filed by “anti-ESG” proponents during the period, including a proposal from NCPPR pushing tech giant Intel to issue a third-party review on whether its activities and expenditures related to doing business in China align with its ESG commitments. The demand won 4.4% support.

CBIS also backed a proposal from NCPPR asking Ford Motor Company to report on the extent to which its business plans regarding electric vehicles may involve, rely or depend on child labor outside of the U.S. NCPPR moved to highlight that 59% of global cobalt supply comes from the Democratic Republic of the Congo, and that as many as 40,000 children work in these mines representing significant potential human rights violations and risks. The resolution attracted 6.5% support.